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CPA's & Business Advisors

Casualty Loss Instructions

As a result of the flooding in the Mt. Pleasant and Midland areas this June, H&S Companies wants you to know we stand ready to help! If you suffered damage to your home or personal property, you may be able to deduct the losses you incurred on your federal income tax return. Here are a few tips you should know about deducting casualty losses:
Casualty Loss:  You may be able to deduct casualty losses based on the damage done to your property as a result of the flooding.
Normal wear and tear:  Casualty loss do not include losses incurred from normal wear and tear to your property.
Covered by insurance:  If your property was insured, you must file a timely claim for reimbursement of your loss. If you don’t, you cannot deduct any casualty losses as a result of the flooding. You must reduce any losses by the amounts of any reimbursements you have or are expected to receive from your insurance company.
When to deduct:  As a general rule, you must deduct the casualty loss as a result of the flooding when you file your 2017 tax return. However, if Isabella and Midland counties get declared as a federal disaster area, you may have a choice of when to deduct the loss. You can choose to deduct the loss on your 2017 return or on an amended 2016 return. Claiming a disaster loss on the 2016 return may result in a lower tax for 2016, often producing a refund.
Amount of loss:  You figure the amount of your loss using the following steps:

o Determine your adjusted basis in the property before the flooding. For property you buy, your basis is usually its cost to you.
o Determine the decrease in fair market value, or FMV, of the property as a result of the flooding. FMV is the price for which you could sell your property to a willing buyer. The decrease in FMV is the difference between the property’s FMV immediately before and immediately after the flooding.
o Subtract any insurance or other reimbursement you received or expect to receive from the smaller of those two amounts.

10 percent rule:  Casualty losses on personal-use property must exceed 10% of your adjusted gross income.
Future income:  Do not consider the loss of future profits or income due to the casualty as you figure your loss.
Business or income property:  Some of the casualty loss rules for business or income property are different than the rules for property held for personal use.

For more information regarding casualty losses, please visit the IRS website here for further details and instructions: https://www.irs.gov/taxtopics/tc515.html

As always, feel free to give us a call at 989-817-4900 or check out our Mt. Pleasant location page and reach out to one of our CPAs!

CPA's & Business Advisors

IRS phone scammers caught!

IRS scams have been a big problem over the past few years, and it doesn’t seem to be slowing down. Luckily, this group of phone scammers were caught!

Just remember that the IRS will never call you and ask you to wire money. They will never email you telling you what you owe. And they will certainly never threaten you!

If you ever have a situation where you are unsure of its legitimacy, please don’t hesitate to call us – we are here to help!

Click here to read the article from the Detroit Free Press

CPA's & Business Advisors

IRS Warns of FAKE Emails…

Beware! The IRS and Security Summit Partners now warn of fake tax bill emails!

The tax bill may claim to be related to the Affordable Care Act. The IRS has received several reports of scammers now sending out fraudulent versions of CP2000 notices for the 2015 tax year via email. Generally, the scam involves an email that includes the fake notices as an attachment.

You can read more by clicking the image below. As always, please reach out to us with any questions!

Click to Download

Click to Download

 

CPA's & Business Advisors

What Employers Need to Know…

…about the Affordable Care Act, that is! Click the image below to download this one-pager from our friends at the IRS for some very helpful information and links regarding employers and the ever-confusing Affordable Care Act!

Still have questions? No problem, that’s what we’re here for. Please contact one of our qualified CPAs today! Check out our locations page for one near you.

Click to Download

Click to Download

 

CPA's & Business Advisors

Are you an applicable large employer?

With the Affordable Care Act there are certain requirements of you if you’re an applicable large employer. If you’re not sure, well, no fear, there are steps you can take to determine if you are one or not. Click the image below to download a helpful one-pager that the IRS has put together on this very topic. There are active links that take you directly to further information, should you need it!

As always, H&S Companies is here to guide you through the tax jungle. Please contact one of our many qualified CPAs or Accountants with any questions. Take a look at our locations pages to find someone near you.

Click to Download

Click to Download

 

CPA's & Business Advisors

Thieves stole tax info from IRS!

USA Today released an article on May 27th saying thieves hacked into an Internal Revenue Service online service, coming away with the tax information from more than 100,000 taxpayer accounts.

Click the link or image below to read the full article:

http://www.usatoday.com/story/money/personalfinance/2015/05/26/irs-breach/27975205/

thief graphic

Click here for the USA Today article: IRS says thieves stole tax info from 100,000

 

CPA's & Business Advisors

Some Non-Profits Asked to Complete Self-Declarers Questionnaire



irs-questionnaire-hs-companiesThe IRS announced that they will be doing compliance checks on some organizations that declare themselves tax-exempt under section 501(c)(4), (5) and (6). Please note, the questionnaire is optional and you are only eligible to complete it if you receive a letter in the mail from the IRS that includes a PIN, password, and source ID.

According the IRS, responses will help them understand these self-declared organizations and help to determine if they complying with the law

Phishing for Information | Beware of Fake IRS Site



Phising, Fraud, Scam

"If I cast enough lines, I'll catch a big fish..."

On October 25th, the IRS issued a warning regarding a new tax scam. Taxpayers have been receiving solicitations to use web-based products on a fake IRS site. This site is designed to steal your personal information. The real IRS e-Services page is for tax preparers and payers only and is found at www.irs.gov.

If you receive a solicitation sending you to a site ending in .com, .net, .org, etc., it’s not the authentic IRS site. Also, keep in mind that the IRS will never initiate contact with you via email or web channels (like social media). If you do receiving a phishing message, please be sure to report it to the IRS.

If you have questions regarding correspondence from the IRS, please contact your H&S team member today.

photo credit: wit via photopin cc



Phishing for Information | Beware of Fake IRS Site




Phising, Fraud, Scam

"If I cast enough lines, I'll catch a big fish..."


On October 25th, the IRS issued a warning regarding a new tax scam. Taxpayers have been receiving solicitations to use web-based products on a fake IRS site. This site is designed to steal your personal information. The real IRS e-Services page is for tax preparers and payers only and is found at www.irs.gov.
If you receive a solicitation sending you to a site ending in .com, .net, .org, etc., it’s not the authentic IRS site. Also, keep in mind that the IRS will never initiate contact with you via email or web channels (like social media). If you do receiving a phishing message, please be sure to report it to the IRS.

If you have questions regarding correspondence from the IRS, please contact your H&S team member today.

photo credit: wit via photopin cc


Another Charitable Contribution Deduction Lost on a Paperwork Technicality

charitable contributions perks

If you made a charitable contribution and received a ‘perk’ in return, such as a free round of golf, you need to make sure you document it correctly.

Last week, a couple was denied their $18.5 million deduction due to a paperwork technicality, this week there was another case of a taxpayer losing their deduction based on a paperwork problem.

A $25,000 charitable contribution deduction was rejected because the donee organization failed to document whether the donor received any ‘perks’ as a result of the donation.

Why Does This Need To Be Documented?

This needs to be documented because you may only deduct the donation less any perks received. Here are a few examples:

  • You donate $200 to your favorite charity and, as a thank you, they give you two tickets to an MSU football game. The tickets have a fair market value of $100. You may only deduct $100 because of the ‘perk’ you received.
  • Concert tickets go on sale with all proceeds supporting your favorite charity, so you buy them for $50. The concert tickets have a fair market value of $14. You may only deduct $36.
  • You buy tickets to a benefit dinner for $500. The fair market value of the dinner and drinks you receive is $100. You may only deduct $400.
  • At a silent auction you bid $5000 on and win a flat screen TV. The fair market value of the TV is $1000, so you may only deduct $4000.

 

What if I received documentation from the organization I donated to, but they failed to document all the required information?

Contact the organization as soon as possible to receive proper documentation! The IRS has been cracking down on compliance with charitable contribution deductions, so you will want to make sure to keep your paperwork organized and ready for next tax season.

Further Reading + Useful Links
This Tax Season is Almost Over, But Stay Organized for Next!
In the News: Couple Loses $18.5 Million Deduction on Technicality
IRS Publication 561, Determining the Value of Donated Property
IRS Publication 526 (2012) Charitable Contributions

Form 8283, Noncash Charitable Contributions